Andrada Mining Ltd (AIM:ATM, OTC:AFTTF) has partnered with Chile-based SQM (NYSE:SQM), one of the world's largest lithium chemicals producers, to develop its Lithium Ridge prospect at Uis in Namibia.
In a three-stage deal, SQM (NYSE:SQM) can take a 50% stake in Grace Simba Investments (GSI), the Andrada subsidiary with the Lithium Ridge licence.
Initially, SQM (NYSE:SQM) will pay US$2 million upfront, followed by US$20 million of exploration expenditure over three years for a 40% stake in GSI with a further 10% earned for funding a definitive feasibility study.
Andrada, which will remain the operator, will also get a success fee if a lithium resource of more than 40 million tonnes is established.
Anthony Viljoen, Andrada’s chief executive, said: "We are incredibly pleased to announce our partnership with SQM (NYSE:SQM), a global leader in the lithium industry and to be part of the first African partnership that SQM has entered.
“This partnership solidifies our belief in the Lithium Ridge asset as a potential world-class resource and further establishes Andrada as a multi-asset, polymetallic explorer and miner.
“We believe this partnership also significantly enhances the value of our entire asset portfolio.
“The introduction of a substantial player in the global lithium market will also place Namibia at the forefront of the African lithium development trajectory and unlock value for the Namibian mining industry.”
Mark Fones, the CEO of SQM’s lithium division, added: “Namibia is among the top mining jurisdictions in the region, and we are pleased to begin exploration with a proven partner like Andrada Mining."